What is Hyperliquid? HyperCore, HyperEVM, HLP and HYPE

Hyperliquid is a layer 1 blockchain built around its own onchain order book, and most of what matters to a depositor comes down to which half of the chain their money sits in and who carries the loss when a trade goes wrong.

Hyperliquid is a layer 1 blockchain best known for perpetual futures and spot trading, run through a fully onchain order book and secured by its own proof-of-stake consensus, HyperBFT. It was built by Hyperliquid Labs, a self-funded team led by Jeff Yan that came out of crypto market making. Over the 12 months to 27 September 2026, traders paid $911 million in fees on the exchange, according to DefiLlama, and the HYPE token carried a market value of $20.4 billion on CoinGecko the same day.

The chain has two parts that share one consensus. HyperCore holds the order books, margin accounts and the exchange's own vaults, including the community-owned HLP. HyperEVM is a general-purpose smart contract layer, compatible with Ethereum tooling, where lending markets, DEXs and tokenised vaults live. Knowing which part a product runs on explains most of how it earns, how withdrawals work and what can go wrong.

Common Hyperliquid terms

How Hyperliquid works

AMM vs offchain order book vs onchain order book

Decentralised exchanges match trades in one of three ways. An automated market maker (AMM) works like a currency exchange booth with a posted rate: traders swap against a pool of two tokens, and a formula moves the price as the booth runs low on one currency. An order book works more like an auction, where a trade happens when a buyer's bid meets a seller's ask.

An offchain order book holds that auction in a private back room: the operator's servers store and match orders and only the final trade is settled onchain. Hyperliquid holds the auction on a public stage, keeping the order book in the chain's state so every order, cancellation, trade and liquidation goes through validator consensus. The Hyperliquid documentation puts median end-to-end latency at 0.2 seconds for a co-located client and throughput at about 200,000 orders a second.

Accounts, deposits and validators

Traders connect a wallet, deposit USDC (natively minted on Hyperliquid by Circle, with a legacy bridge from Arbitrum) and trade from a margin account. There's no account sign-up in the exchange sense, since the chain holds balances and the trader keeps the keys. An active set of 27 validators, chosen by delegated HYPE stake, produces blocks, and more than two thirds of stake has to agree to commit each one, according to hyperliquid.xyz.

HyperCore vs HyperEVM

The split between the two halves decides what a depositor is holding. HyperCore is purpose-built and closed to arbitrary code: it runs the matching engine, margin system and a fixed set of features. HyperEVM went live on 18 February 2025 and accepts any Solidity contract, which is why lending protocols, DEXs and vault managers build there. Both sit under the same consensus, so the HyperEVM documentation describes it as part of one chain, with no bridge between the two halves.

The connection between the two sets HyperEVM apart from other EVM chains. A lending contract on HyperEVM can read a token's price straight from the HyperCore order book and, through the CoreWriter system contract, place an order on that book to liquidate a borrower. Assets such as HYPE and USDC exist on both sides and move between them without a third-party bridge. DeFi value on HyperEVM peaked at $2.77 billion on 19 September 2025 and stood at $1.25 billion a year later, according to DefiLlama's chain data.

HLP, user vaults and ERC-4626 vaults on HyperEVM

"Hyperliquid vaults" can mean three different products, and each carries a different kind of risk. The first two live on HyperCore and trade directly on the order book. The third lives on HyperEVM as a smart contract that issues a share token, the model Ethereum formalised as ERC-4626.

HLP, the protocol vault

HLP makes markets across Hyperliquid's listed perps, takes over positions that the liquidation engine can't close in the market, and earns a share of trading fees. Anyone can deposit USDC and share in its profit and loss, with no fee or profit share taken, and deposits are locked for 4 days after the most recent one, according to Hyperliquid's protocol vaults page. On 27 September 2026 the vault held $182.8 million, had made about $138 million in cumulative profit, and showed an annualised return of about 3.7% on the Hyperliquid API.

HLP earns most in violent markets, because it buys liquidated positions at a discount and sells them back into the book. During the crash of 10 October 2025 it booked about $40 million, as CoinDesk reported. The same role exposes it to traders who build a position large enough to hand HLP a loss, which is where most of Hyperliquid's incidents have landed.

User vaults

Any trader can open a HyperCore vault with at least 100 USDC and a 10,000 USDC creation fee, then trade on behalf of depositors. The leader keeps 10% of profits and must hold at least 5% of the vault at all times, and depositors can withdraw 1 day after depositing, according to the vault leader documentation. Hyperliquid now labels these HyperCore vaults "legacy": they can trade validator-operated perps only, with no spot or HIP-3 markets. The vault page shows each leader's profit and loss, drawdown and positions, which makes a user vault closer to copy-trading one person than to a diversified fund.

Tokenised vaults on HyperEVM

Hyperliquid's own documentation points builders to HyperEVM for new vaults, describing contracts that follow ERC-4626 while trading on HyperCore through CoreWriter, with accounting read onchain through precompiles. A depositor receives a share token that can move between wallets, sit as collateral in a lending market or be read by any ERC-4626 integration. These vaults can combine HyperEVM lending, HyperCore trading and positions on other chains in one product, with the rules set by the contract and its curator.

What is the HYPE token?

HYPE is Hyperliquid's native token, with a maximum supply of 1 billion. It pays gas on HyperEVM, is staked to validators to secure HyperBFT, gives fee discounts to stakers, and is staked by builders who deploy HIP-3 markets. At the genesis event on 29 November 2024, 310 million HYPE (31% of supply) went straight to about 94,000 early users with no claim step and no allocation to private investors, as The Block reported at the time.

On 27 September 2026 HYPE traded at $91.81, a few days after an all-time high of $97.96 on 23 September, with 222 million tokens circulating, according to CoinGecko. Staking happens on HyperCore: delegations lock for 1 day, moving HYPE from staking back to spot takes 7 days, and the reward rate falls as more HYPE is staked, at about 2.37% a year with 400 million staked, according to the staking documentation.

How Hyperliquid makes money

Hyperliquid earns from trading fees. Perp takers pay 0.045% at the base tier and makers 0.015%, falling with 14-day volume to zero maker fees above $500 million, per the fee schedule. Spot fees are higher, and HIP-3 deployers can add their own fee share on top. There's no investor cap table taking a cut, since Hyperliquid Labs has taken no outside capital.

Almost all protocol fees go to the Assistance Fund, which buys HYPE on the open market; DefiLlama counts the share at 99%. Of the $911 million in fees over the past year, DefiLlama records $688 million as protocol revenue, and $56.4 million in the 30 days to 27 September 2026. Buybacks follow volume, so they shrink when trading slows: Forbes, using DefiLlama data, tracked quarterly repurchases falling from $316.8 million in the third quarter of 2025 to $192.3 million in the first quarter of 2026.

Depositors earn from Hyperliquid in several ways. HLP depositors take a share of market-making and liquidation profits. Lenders on HyperEVM earn interest from traders who borrow against HYPE and other collateral, a pattern covered in our explainer on how DeFi lending works. Delta-neutral strategies collect the funding perp longs pay shorts, which is the trade described in funding rate arbitrage, and those rates turn negative in falling markets.

Is Hyperliquid safe? Past incidents and risks

Hyperliquid's incidents to date have come from traders gaming thin markets, with HLP on the receiving end, and from the governance decisions made in response.

The JELLY decision drew criticism because a small validator set, in which the Hyper Foundation held a large share of stake, changed a market's outcome by vote. That reaction protected HLP depositors and also showed that the rules can move under stress. Hyperliquid's founder has argued that HLP's losses stay inside the vault and that the exchange doesn't depend on it to run.

• Liquidation and ADL risk: traders can be closed out by ADL even when their own position is profitable.
• HLP risk: depositors absorb losses from manipulated or illiquid markets, and can't withdraw within 4 days of their latest deposit.
• Validator concentration: a set of 27 active validators can vote on delistings and settlement prices.
• Smart contract risk on HyperEVM: each lending market, DEX or vault adds its own contract risk on top of the chain.
• Bridge risk: non-native assets arrive through bridges, each with its own security model.
• Leader and curator risk: a user vault or tokenised vault is only as sound as the person or team making allocation decisions.

Always make sure to do your own research and be aware of the above and any other risks before depositing.

Upshift vaults on HyperEVM

Upshift runs non-custodial vaults across more than 30 chains, and its HyperEVM deployment follows the tokenised model Hyperliquid describes. The Coinmerce Capital USDC vault, curated by the Dutch asset manager Coinmerce Capital with Clearstar, launched on 11 May 2026 and runs lending, HYPE basis and cross-chain strategies from one USDC deposit; the launch announcement covers the strategy in detail. On 27 September 2026 the vault held $1.74 million and returned 0.65% over the previous 30 days, according to Upshift's vault data, and past returns don't guarantee future ones.

The difference from a user vault is in the controls. Curators can only move funds into the protocols, tokens and functions the vault's policy engine allows, the vault owner is a multisig, and the contracts have been through 10 smart contract audits by 6 independent firms. The division of duties between curator, infrastructure and depositor is set out in who does what in an onchain vault, and the limits a curator works within are described in Upshift's risk management framework.

Frequently asked questions

What is Hyperliquid used for?

Mostly for trading perpetual futures and spot tokens on an onchain order book. HyperEVM adds lending, borrowing, token issuance and vaults, and HIP-3 lets builders list their own perp markets, including equities and commodities.

Is Hyperliquid a blockchain or an exchange?

Both. Hyperliquid is a layer 1 blockchain whose native layer, HyperCore, runs the exchange, with a general-purpose smart contract layer, HyperEVM, secured by the same validators.

What is the difference between HyperCore and HyperEVM?

HyperCore is the built-in trading engine for order books, margin, staking and native vaults. HyperEVM is an Ethereum-compatible layer where anyone can deploy contracts, and those contracts can read HyperCore prices and place orders on its books.

What stops an offchain order book operator from reporting false trades?

On designs such as dYdX v3, which ran on StarkWare's StarkEx, every order carries the trader's own signature, and each batch of trades settles on Ethereum with a validity proof that a contract checks before accepting the new balances, so a batch with invented numbers fails and never settles. The operator can still delay or refuse orders, choose the matching sequence or go offline, and StarkEx's forced operations give traders a way out: if the operator ignores a withdrawal requested onchain, the trader can freeze the contract and withdraw directly from it. Hybrid exchanges without proofs rely on the operator's reputation, audits and proof of reserves. Hyperliquid moves matching onto the chain itself, where validators process every order in public.

What is the HLP vault on Hyperliquid?

HLP is the community-owned protocol vault that makes markets, takes over liquidations and earns part of trading fees. Depositors share its profit and loss with no fees, and deposits lock for 4 days.

Is Hyperliquid safe?

It carries real risks. HLP depositors have absorbed losses from market manipulation in 2025 and 2026, and validators have intervened in markets under stress. HyperEVM apps add their own smart contract risk.

What is HYPE used for?

HYPE pays gas on HyperEVM, is staked to validators to secure the network, earns stakers fee discounts, and is staked by builders deploying HIP-3 markets. Most trading fees go to buying it back on the open market.

Who founded Hyperliquid?

Hyperliquid Labs, led by Jeff Yan and a co-founder known as iliensinc, both Harvard classmates, with team members from Citadel, Hudson River Trading and Airtable. The team is self-funded.

Keep reading

• Coinmerce Capital launches a USDC vault on HyperEVM. The strategy and structure behind Upshift's HyperEVM vault.
• What are DeFi yield vaults. Strategies, risks and how to compare vaults.
• What is TVL. How value locked is measured, and what it leaves out.